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tv   Bloomberg Markets  Bloomberg  August 4, 2015 1:00pm-2:01pm EDT

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is trumping his competitors. can it last? the result of our exclusive bloomberg poll. betty: what's behind the recent drop in twitter shares and white might be even more attractive as a takeover target. mark: what the nasdaq composite market is doing to try to court the hottest up-and-coming -- betty: good afternoon. i'm betty liu. mark: thank you for joining us on bloomberg market day. let's begin with a look at the markets on this tuesday. we've seen two days of the clients for stocks. a sea of red on wall street today. our industrials down over .25%. .5% -- shy orbout
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to buy the company for about $30 billion. down --es of shire let's move on to oil and gold today. all in the green. nymex crude up 1.8% at 4602 -- $46.02. betty: a check on how the bond markets are trading right now. treasuries are falling on speculation that inflation will rise toward the fifth 2% target. -- fed's 2% target. puerto rican bonds taking a dive. that is year to date, down 11%. meanwhile, in the currency markets which have seen their own fall off, the dollar is
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falling from a four-month high. it is still stronger than most of its major peers. let's get a look at the top stories at this hour. shire making an offer to buy x axalta. for $30 billion in shares. 36% represent a premium of and valleys the stock at $45 per share. there is no deal on the horizon right now. alta has failed to engage in substantive discussions. the company agreed today to buy ipc health care -- the all caps deal is worth $1.6 billion. it were presents a premium of 30% percent -- 37% over the close yesterday. ability toand its
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staff hospitals and other medical facilities with doctors. cvs health narratives forecast at the retail sales grew slower in the second quarter. the new forecast overshadows the second part of profit report. excluding one-time items, earnings came in two cents above the average of analyst estimates. betty: david einhorn not so sorry to see july over. 's investmentpital for polio dropped 5.9% in july. its losses were broad-based. -- portfolio dropped 5.9%. >> the market environment has become acutely unfair for investment strategy. while we could have done better in a couple spots, we don't expect to do well when investors shun value stocks in favor of momentum stocks. we've experienced this dynamic a few times before. the short-term results have been painful for us. as before, we expect the environment will improve and we will recover. mark: the head of greenlight
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capital says it was the worst month for the company's portfolio since 2008. the trouble in greek stocks is deepening. one day after the worst selloff in nearly 30 years. nearly 5% right after trading opened on the exchange.hens stock falling 15% yesterday, the first introductory five-week shutdown. system --ek banking they have to recapitalize the four major banks. they have major problems with their nonperforming -- unless you get the greek banks up and running, there is no hope for this plan to succeed. betty: bank stocks being punished. the white house is hosting its first ever demo day. the goal is to showcase the wide-ranging talents of innovators across the country. joining president to demonstrate their individual success stories. the white house is encouraging
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others across the country module on japan hours, innovation spaces, university said others -- and others to post their own demo day event. we will get a preview of the latest earnings from disney and etsy. betty: why many growing company's are turning to the nasdaq to raise funding for their businesses. we will speak with jeff thomas. truststate investment are the darlings of the market and a low interest rate environment. enticing yield binary investors with high dividends -- though starlings are becoming more distasteful as interest rates are looming. mark: what kind of buying opportunities are in the greek market? one of the biggest greek investors joins us in studio. welcome. it is good to see you. talk to us about the fundamentals. >> the fundamentals are good.
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occupancies are high. are increasing. there is not a lot of new construction in most major markets. the fundamentals have been stable and improving over the past several years. we don't see in and to that. -- an and to that. it will be great if it's that easy -- betty: investors were so simpleminded. >> a lot of commentators say just rates are rising and everybody knows that. a great way to make money when everybody already knows that. is a lot more to re-prices than just interest rates. we had a tremendous run last carrying 30% into the first order and the rising interest rates we had seemed to be an excuse to have some kind of pull back. upjuly, rates are already.
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we can't call this a distasteful environment for real estate. mark: are there some rates that are more than others -- more protected than others? >> some of the less protected ones are ones that don't have high growth rates. there are number of health care entities that don't have the same growth potential. higher interest rates could create competition for them. we are very consumer-oriented. think rising just rates are accompanied by a stronger economy. -- it you say health care has been puzzling why health care has not done well. what do you mean by that lead? >> a lot of these health care property owners, nursing homes or hospitals don't have a lot of participation in increasing revenues such as a shopping center or apartments where rents
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can rise regularly as demand for importance increases -- apartments increases. the: in a strange irony, jobs market, the strength of the jobs market causing problems in the week market. >> the strength the jobs market and household formations, a very big deal, grading demand for a multifamily residence. most people when they started family like my kids, they rent an apartment. for theple get the job first time, the rent an apartment. there is a german is need for rental housing in this country. need for rental housing in this country. it's good for owners of apartments. betty: at what point does the overall stall in the market -- if we can bring up the index which has dropped over the last year.
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when does it becoming buying opportunity? after the fed raises interest rates? >> i've never been good at predicting short-term. any interest rate fears that might be influencing investors is already reflected in the market. everybody knows that already. the most important factor in real estate and reprices will be the velocity of the economy, economic growth. mark: the real estate market here in new york and san francisco, those markets have been on fire. is it too hot? >> in some cases, it might be. in some neighborhoods, it might be. when we look at household , places where there is a high amount of intellectual density where that growth is -- there is a surplus of unskilled labor.
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go, new york,es boston, that's where the new economy is. -- san francisco, new york, boston. are you anticipating were weak products coming onto the market as retailers spin off the real estate assets? food companies spinning up the real estate assets. >> that is a whole other discussion. i'm not sure that is a formula for long-term success. short-term pop in the stock price, but you want to control your business. , owningour property were you do business is an important element to that. mark: what does the market for reed ipo's look like? >> only two through ipo's -- a lot of private companies. boom, but itd a hasn't happened because private
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market financing is so attractive today. there's not a lot of need for new equity capital. mark: thank you so much. betty: an investor in the real estate investment trust work it. disney reporting their earnings after the bell. mark: a preview, including a look at what the company may say about offering espn as a stand-alone service that is not part of a cable package. bloomberg market day continues just a moment. ♪
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betty: welcome back to the bloomberg market day. mark: it is time for a check of the markets on this tuesday.
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julie hyman is standing by with the details. disney and etsy. julie: disney will be reporting its earnings after the close of trading today. i had at that, shares up .5%. investors want to hear more about the possibility that espn will be offered as a so-called over-the-top service. will it be available not just through cable, but through the web, etc.? just like hbo and other networks. will espn be offered in a similar way? we are seeing a lot of forward focus. december, the release of the next film in the star wars franchise, which should be huge for disney if all goes well. any predictions on that front will also be important. the largest portion of the business, the media business, looking for $5.7 billion in revenue.
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we will be looking at the consumer products revenue and the parks and resorts revenue is well, which has been very strong. yeary shares over the past , incredible performance from this company. the last time the company reported earnings -- a couple reports ago, we had a decline. two times ago, an increase. ,ou get mixed performance here not just based on what the company is saying, but on forecast and forward-looking -- we will see what happens this time around. as for etsy, they've been having a tough time. analysts predict it will report a loss of five cents. we will be looking to hear any more information about competition from amazon plus new service designed to compete directly with etsy. any information on allegations and problems with counterfeit items appearing on etsy. that has been an ongoing issue.
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also, the effect of currency on numbers.sy -- etsy's quite a different situation from disney. the share price over the longer term -- this time, looking at etsy. this is etsy since the ipo. $16 when it came public. it dipped below it earlier this month before recovering. not much of a recovery with a 7% decline today. reflecting the pessimism going into this earnings report. i want to take a quick look back at the earnings winners and losers today. bulk and materials helping the materials group overall. we generally higher and coach showing a smaller drop in comparable sales. eneron generally higher.
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nrg energy and allstate lower. not much move in the overall market today. betty: kind of offsetting each other. thank you so much. let's get a look at the top stories crossing the terminal at this hour. donald trump leading the republican presidential field by a wide margin heading into the party's first televised debate this week. he is backed by 21% of those surveyed. and 10% insecond wisconsin governor scott walker is third with 8%. the survey polled 500 voters who identify themselves as republicans. trump's league as well above the margin of error. the 17 candidates are watching these polls closely. their first nationally televised debate is thursday. only the top 10 will get into the primetime event.
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that could push rick perry and bobby jindal into an earlier less visible event. this will be a busy day for president barack obama. -- it is also his 54th birthday. like most presidents, he has more gray hair than when he took office seven years ago. he became the fifth youngest president to enter the white house. adidas has its eyes on this summer's biggest basketball sneaker free agents. the company offering james $200n a 13 year deal worth million. the same one betty has been his latest deal with nike recently expired and nike has to match the deal or let him walk away. lookompany likes hardens and style and his game. he was the runner-up in this year's most valuable player award.
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$200 million. betty: are we a little gray or two after nine years -- grayer, too, after nine years? toughcoming up, twitter's talk maybe turning into a takeover target. ♪
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mark: how spectacular is that? a live shot of the san francisco bay bridge on this tuesday. welcome back to market day. i am mark crumpton, here with betty liu. betty: wish i was there. twitter's tough talk maybe turning it into a takeover target. yesterday, shares fell to the lowest price since the ipo in 2013. they are up marginally today. betty: executives warned that it will be a while before the company stands the slowdown in user growth. less than 20 million -- could this be a buying opportunity for twitter? cory johnson isn't san francisco with more -- is in san francisco with more.
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is this more than just some chatter from a few interested shareholders or is there actually real interest and a possibility of an acquisition of twitter? cory: i'm concerned about crumpton's introduction of me there. i do want to be a responsible journalist here. i don't want to start to speculate that twitter is in play. i think it is good to look at the business, look at how the business works and how much the business costs so we can put in away silly rumors or speculation. this is a big business, very e.pensive trainin it is market value of $19.2 billion. it has about $1.2 billion in debt.
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you have essentially a $17 million enterprise value and there are not a lot of companies with an interest in technology and gaining what you would get if you would buy twitter. mark: what does twitter due to described as ave slowdown in user growth? u.s. user growth was nonexistent last quarter. slower and slower growth domestically. the growth internationally has in a less value because they are product.with an sms paying a fraction of what u.s. advertisers pay. the slowing growth is an issue for twitter. issues that is not a huge deal for this company is the lack of profitability. the lack of profitability is principally a result of issuing stock options, it is not a cash
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issue for them. once you strip out the stock-option costs, you see a business that will do about $250 million in revenue in the current year. generate --a lot to betty: $17 billion. who has the money to buy this company? losses andof the stock options, and would not be -- it would cause their earnings to decline after spending that $17 million. look at compass like apple, microsoft, google, facebook, they could afford to do such a deal. , their earnings power has been so strong. who can imagine what the ultimate price would be? will twitter find a way to work out these problems on its own? they don't know who their leader will be in the future.
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mark: cory johnson joining us live from senator scott. thank you so much. -- live from san francisco. betty: i still need to get mark crumpton on twitter. a good time for me to leave. mark: coming up in the next half hour, we will take a look at how the nasdaq is entering the pre-ipo market. ♪
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mark: welcome back to the bloomberg market day. i am mark crumpton in york,
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thank you for staying with us. let's get straight to your top headlines at this hour. scott, who has been overseeing george soros is orton for the last four years will leave at the end of the year two start his own hedge fund firm. -- overseeing george soros's fortune for the last four years. that will make his firm one of the largest hedge fund startups ever. he will continue to advise the soros family after he leaves the investment strategy and asset allocation will be managed by the existing committees of robert soros. john kerry is in singapore where he called for the countries negotiating a major pacific rim trade deal to overcome their differences. he said that the so-called transpacific partnership would benefit the people of all nations and serve as a model for responsible global industry and commerce. >> every participant will have
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to comply with core myernational labor and in mental standards. every participant will have to refrain from using underage workers, unsafe workplaces. -- environmental standards. ensuring state-owned companies are competing fairly with ones that are privately owned. every participant will have to fight trade related bribery and corruption. ensure free and open digital trade and safeguard intellectual property. mark: secretary kerry's comments talks andys of hawaii. russia's foreign ministry says it is submitting a bid to the united nations for large expanses of the arctic. russia's claiming more than 463,000 square miles of seashell extending 350 nautical miles from short. -- from shore.
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it is believed to hold up to a quarter of the planets undiscovered oil and gas. -- thefor u.s. factories commerce department says factory orders advanced 1.8%. manufacturing has been held back by a rising dollar, which dampens exports and falling oil prices which have cut into energy industry investment spending. northern california trying to stand their ground against a massive wildfire. their task is daunting. the blaze has jumped a containment line and grow to nearly 97 square miles. crews are getting some help from lower temperatures and higher humidity. 13,000 people have been required were advised to evacuate and two dozen homes have been destroyed. those are your top stories at this hour. , we will look at how
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the energy industry is planning to challenge president obama's new regulations to reduce pollution from power plants we will hear from the former head of the u.s. auto task force. what he says about the markets today and how millennial's are coping with low pay and high college debt. nasdaq is making it easier for small companies to raise money. last year, the exchange launched nasdaq private market, which led investors by early shares and allows for employees to liquidate the company equity. 100 companies are using the platform am including pinterest and shazam. is it the right strategy? let's ask the man in charge of the initiative, jeff thomas. he joins me in studio. thank you so much for joining us. jeff: thank you for having me. mark: talk to us about the requirements for people to get .n the npm
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jeff: it is a platform built for companies. the companies can create and set up a program for employees to sell stock to prearranged investors. companies are selecting to work with institutional investors, which are largely mutual funds and hedge funds that historically invest in public companies. given how long they are staying, the invest in private companies. givenis the time for this how chaotic the world of corporate funding can be right now? jeff: companies are sting private longer. nasdaq worked extensively on the jobs act, which made it easier for private companies to stay private by increasing the number of shareholders they can have from 500 to 2000. investors are saying we need to go get involved earlier in the companies have to find a way to provide liquidity to their employees. mark: how much control do companies have? jeff: it is entirely company control.
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copies want to structure and set up structure liquidity programs. they select investors. it seems this has been a success. -- and hass since been over a year. there have to of been some bumps in the road. what were they? jeff: one of the trends we are seeing right now is that companies are starting to use our platform and an even earlier stage. historically, this was something compass would do once right before an ipo and now we see companies coming in and setting up liquidity for employees -- that creates challenges for the company to set proper expectations with their shareholders. mark: what made this venture into the secondary market different from other attempts by nasdaq? attempts -- they never gained traction. jeff: it comes down to our focus
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on issuers. working with the cubbies to help them solve key challenges. to help them solve key challenges. google and facebook are offering rich compensation packages. private company's need a way to compete for talent. helping this private companies compete with public companies for employees. mark: it seems companies are waiting a lot longer these days to go public. why is that? jeff: they have a lot easier access to capital. through the jobs act, they've got a lot more flexibility in terms of the number of shareholders and investors you can take on. companies are being careful. they want to make sure they have their business model for early -- fully brought through -- thought through. mark: you talk about the business model. can you compare and contrast the business model to what we're seeing in the private market right now? as they are bringing on
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more sophisticated investors, companies are starting to put in place a lot of the rigor reserved for public companies. we see private copies crating audit committees, establishing more formal compensation plans. what do you see for the future of the private market? you've had a year that seems to have been successful. the next year, the next two years, what are you looking for? jeff: private companies are offering their shareholders ability to share -- sell shares once a year. in the future, we think that will become much more frequent. copies will offer liquidity on a quarterly or monthly basis. mark: what about the use of the bitcoin infrastructure? how is that helping what you are attempting to do? jeff: we are doing a pilot program with block chain technology, and open letter that can help track assets. helping companies track their equity using this block chain
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technology which provides a great audit trail and great ability to make these markets more efficient. mark: wow. a lot to get in and five minutes. -- in five minutes. a pleasure to meet you. still ahead, china has gone from growth engine to source of concern for carmakers such as bmw and toyota. we will navigate this market after the break. ♪
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to theelcome back
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bloomberg market day. i am mark crumpton. let's take a look at the european market close. >> we've seen stocks fall in europe today. snapped a600 has five-day rally. we've seen some commodities rebound, pushing commodity producers hire. they have been the biggest gainers on the benchmark, that has been outweighed by decline for banks. let's look at the individual stocks we have been watching today. mean -- iee what i want to start with axel springer , one of the biggest gainers on the stoxx 600 today. net income beat estimates. this was the company that missed out on buying the ft from peers. they would have loved to buy the ft but the $1.3 billion that nikkei paid for it was too expensive. the stock has been gaining. credit declining even though the second or profit rebounded.
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it did not get backing from regulators for a reorganization that would have allowed it to basically free up cash to an award investors. one of the biggest losers, national bank of greece the biggest loser down as much as 30% today. those greek banks have been absolutely punished with the opening of the asset stock exchange -- athens stock exchange. down about 1.2% today. that is nothing compared to the 16% loss of yesterday. chinese regulators making a fresh bid to stop a stock market plunge. haltedokerages have their shortselling businesses after the nation's regulators tightened rules to freeze out a traders. authorities are targeting spoofing, suspending 40 accounts including citadel securities. one of citadel's accounts
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suspended by chinese regulators. the couple he says it will operate normally from its offices and continue to comply with all local laws. the pressure on spoofing is a way to shore up investor confidence amid a stock route. making an order than canceling to move stock became well known this year after prosecutors said a london traders use of the strategy led to the flash crash in 2010. regulators have added restrictions to shortselling in the mainland. investors who borrow shares now wait until the next day to pay back the loan. mark: let's get straight to a check of the markets. julie hyman joins me now with a look at the major averages. big tech movers on this tuesday. julie: the major averages have not been seen much movement today. not a lot bigger earnings reports out there. not enough to pull the averages one way or another. you have some drift here.
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this is one stock that has a big effect on the major averages, apple. apple has been declining for the past couple sessions, down 3% at the moment. not a lot of big news events or catalyst for the stock, it has been drifting lower. it is now below its 200 day moving average. this is a momentum indicator that we've watched, the yellow line, the second day that apple has traded below it after 471 days that it traded above it. we have this record for apple back in february. between that and today, a pullback of more than 10%. a correction in apple shares. because it is such a big weight, this is something we watch closely. another one of the big cap tech companies doing better today, netflix. netflix shares trading higher right now by about 8%. initiatinganalyst
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coverage of the stock with a price target of $160 a share. -- paidbout $40 international subscribers should growth rate and margins should jump to 26% by 2020. take a look at my bloomberg terminal, i have a chart of with a's stock price and white line and the a line is the average price target. the average price target right now is $140 a share. -- $114 a share. trading now at $120 a share. just to give you perspective on how optimistic that analyst is. mark: thank you so much. automakers hitting a few potholes in china. bmw says sales are slowing down
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and it may have to revise this year's forecast. at toyota, the company boosted a record quarterly profit but warned of a tough market in china. me with moreoins on this story. matt: a lot of companies coming out and warning that china could hurt them at the end of this year. they are still holding their forecast as a wait and see attitude. bmw is the first to reduce production, cutting production by 60,000 vehicles. -- 16,000 vehicles. it is much bigger of a deal for bmw that purport, still growing like gangbusters there. n for ford. china, butsales in also pricing pressures.
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more companies coming to this market, consumers are demanding price cuts on whatever they buy. mark: we have a story on the bloomberg terminal. china automobile dealers association recently warning nationwide sales could drop for the first time in more than 17 years if this route on the stock market continues. matt: we saw monthly sales dropped for the first time in two years. they fell 3.8% last month. overall, 23.5 million was how many cars china sold last year. a bigger market than the west car market. it could come back down again. ofare hearing from a lot sources, including the dealership association that a lot of would-be buyers planning on buying cars this year decided a hold off on buying a car because i will invest in the stock market if it takes off. they put the money they would have spent on a car and lost all
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those funds in the crash and are not likely to get them back anytime soon. mark: it was just six years ago in 2009 when china passed the u.s. as the world's biggest car market. in expanding middle class in china. people were running to the dealerships. matt: you will still see expanding middle class. ford says we are still in this for the long haul. they put a lot of production in china. gm as well, doing a joint venture ship with a chinese company. markets will go through these fluctuations. nothing goes up in a straight line. there are a lot of issues with china. they have a real pollution problem. if you live in beijing, it's tough to get a license to buy and drive a car because they don't want anymore illusion producing engines running around. be this will help tesla. on with uss coming
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in the next hour. he is fascinating. not only was he a former campaign manager for mike , but he founded task strategy --tusk strategy and tusk ventures, disrupting industries and managing political risks and media risks. in their fight -- this last month, against bill deblasio. we will ask him about that. his business operates in an interesting way. he takes a stake in the company's he advises, not just cash. mark: still ahead, the energy
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industry has had nearly 24 hours obama's sweeping power plant. .- plan we will go over the winners and losers, next. ♪
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mark: welcome back to the bloomberg market day. thank you for staying with us. analysts have had a full night to pick through president obama's sweeping clean power plan he unveiled monday. the $.4 billion proposal aims to cut carbon emissions by 32% by the year 2030. -- $8.4 billion proposal. there will be winners and losers. let's start with the losers. cold ising that touches likely to be a loser -- touches coal.
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was about 45 percent and has fallen to 30% here with president obama's clean power plan. looking at specific stocks, let's go to cold producers. -- coal producers. consol energy down 54%. peabody energy down 86%. we were talking yesterday about alpha natural resources, which did declare bankruptcy, down 98% year to date. coal reliant electric utilities. american electric power, duke energy southern company and firstenergy. mark: we've been hearing the back and forth on capitol hill as well.
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some republican lawmakers not happy about this. >> mitch mcconnell came out and said yesterday right after president obama bailed it that he was not happy about it. -- unveiled it that he was not happy about it. >> not only do they feel to meaningfully affect the global climate, but they could end up harming the environment by outsourcing energy production to countries with poor environment records like india and china. they also may be illegal. >> in addition to mitch mcconnell, jeb bush, marco rubio and ted cruz have also been swinging against this. hillary clinton has said that she is definitely for it. she did tweak her support. tweet her support. i thought clean energy would be the biggest gainer. turns out it is going to be natural gas producers. trade out cold
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for natural gas. carbon gas has 50% less output once it is burned. taking a look at your screen, these are the biggest natural gas producers in the u.s. by market share. devon with 2.4%. those are some of the biggest winners on the natural gas side. then, there is the solar and wind power players. -- some ofalso gain the names there include berkshire hathaway and the couple other companies in the country. mark: the politics will get in the middle of this because you mentioned some of the players, presidentials a campaign season -- >> battle lines are being drawn along partisan lines. i spoke with one of our
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bloomberg intelligence analyst in washington. he doesn't expect that this will be derailed. if this goes to the supreme court, the supreme court has ruled in favor of legislation protecting against greenhouse gases. this may very well become the rule of law. mark: thank you so much. appreciate it. coming up later, donald trump leading republican presidential candidates. the ceo of trump organization will be on with all due respect at 5:00 p.m. new york time. stay with us. ♪
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. .
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is 7 p.m. in london, 2 p.m. in new york. matt: this is the bloomberg
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market day. mark: apple shares have fallen 10% sense they last reported earnings. they continue to fall today. what has investors worried? matt: puerto rico defaults on it debt. we discussed the road ahead and hear from their sole member of congress. mark: once a luxury food, lobster hits the mainstream and you may not be able to afford it that much longer. good day. from bloomberg world headquarters in new york, i am mark crumpton, here with matt miller. let's look at the markets. apple is definitely waiting on the nasdaq. we see the dow and the s&p as well. c

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